Babcock & Brown Infrastructure; BBI - Euroports - Antin Infrastructure ...
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<strong>Babcock</strong> & <strong>Brown</strong> <strong>Infrastructure</strong>; <strong>BBI</strong> - <strong>Euroports</strong> - Amended Sale Agreement<br />
861 words<br />
28 July 2009<br />
01:18<br />
New Zealand Exchange Company Announcements<br />
NZXCOM<br />
English<br />
Copyright (c) 2009 New Zealand Exchange Ltd ( http://www.nzx.com)<br />
<strong>Babcock</strong> & <strong>Brown</strong> <strong>Infrastructure</strong> (ASX: <strong>BBI</strong>) announces today that it has agreed revised terms to the<br />
Share Subscription Agreement dated 22 December 2008 ("SSA") pursuant to which a consortium of<br />
investors consisting of <strong>Antin</strong> <strong>Infrastructure</strong> Partners (acting in its capacity as manager of <strong>Antin</strong><br />
<strong>Infrastructure</strong> Partners FCPR) ("<strong>Antin</strong> IP") and Arcus European <strong>Infrastructure</strong> Fund I ("Arcus") have<br />
agreed to invest in <strong>Euroports</strong>. On completion of the amended Share Subscription Agreement (the<br />
"Amended SSA") (which replaces the SSA), Arcus and <strong>Antin</strong> IP will hold equity interests in <strong>Euroports</strong> of<br />
14.1% and 19.9% respectively. In addition, <strong>Antin</strong> IP will hold a convertible bond in <strong>Euroports</strong> which, if<br />
converted, would convert into a further 5.97% of the equity in the Company, leaving <strong>BBI</strong> holding a 60%<br />
interest. The other key changes to the investment under the Amended SSA are:<br />
- A further capitalisation of the company by all shareholders<br />
- Creation of a significant capital reserve at the <strong>Euroports</strong> level to meet any future <strong>Euroports</strong><br />
liabilities/obligations in the short to medium term<br />
- A share equalisation process in 2012 and 2013 based on the performance of <strong>Euroports</strong> through to that<br />
time. Depending on <strong>Euroports</strong> performance, the aggregate equity owned by Arcus and <strong>Antin</strong> will be<br />
adjusted from the potential up-front 40% holding to an amended holding of between 34% and 65% (to<br />
be held as between Arcus and <strong>Antin</strong> on the same proportional basis of the up-front holding assuming<br />
<strong>Antin</strong> IP converts its convertible bond into equity).<br />
In addition to the Amended SSA, <strong>BBI</strong> has secured agreements with other relevant parties to ensure:<br />
- <strong>Euroports</strong> will move to 100% ownership of its two key JV assets being Benelux Port Holdings (the<br />
owner of Manuport, Westerlund and Magemon in Belgium) and <strong>BBI</strong> Port Acquisitions Luxembourg (the<br />
owner of TPS in Spain and WCT in Belgium).<br />
- Following completion of the Amended SSA and EU clearance for the increased shareholdings at each<br />
asset level, <strong>Euroports</strong> therefore will own:<br />
- 100% of Manuport (Belgium and Bulgaria) - 100% of Westerlund (Belgium and France ) - 100% of TPS<br />
(Spain) - 100% of WCT (Belgium) - 100% of Finnish Ports (Finland) - 80% of TRI (Italy) - 50% of SHRU<br />
(Rostock, Germany)<br />
- Completed debt refinancings at <strong>BBI</strong> Port Acquisitions Luxembourg and Finnish Ports<br />
- Settlement of residual liabilities in Benelux Port Holdings The agreed price under the Amended SSA for<br />
the 40% interest (on a fully diluted basis assuming future conversion of the <strong>Antin</strong> IP convertible) is<br />
141.5 million which equates to a 100% post investment equity value for the <strong>Euroports</strong> business of 353<br />
million. <strong>BBI</strong> will recognise a pre-tax impairment / loss on disposal of approximately 120.0 million. The<br />
final impairment / loss recognised will depend on the finalisation of the year end audited financial results.<br />
All conditions precedent associated with the transaction have been satisfied and as such completion of<br />
the Amended SSA is targeted to occur in late July or early August and a further announcement will be<br />
made in due course.<br />
<strong>BBI</strong> COO Transport and Chairman of <strong>Euroports</strong>, Russell Smith said "This revised transaction represents a<br />
significant strengthening of the balance sheet at <strong>Euroports</strong> creating a strong stable company moving<br />
forward with a considerably simplified structure. This sale, undertaken in one of the most difficult<br />
markets in recent history, balances the value of the underlying <strong>Euroports</strong> portfolio with the possibility
that the current European recessionary environment could, if prolonged, impact the level of previously<br />
anticipated growth at <strong>Euroports</strong> over the next four years. We now look forward to working closely with<br />
<strong>Antin</strong> IP and Arcus as partners in the recapitalised and simplified <strong>Euroports</strong> to support its growth as a<br />
vibrant and growing business with strong market fundamentals."<br />
Mr Smith said "Having completed the recapitalisation, refinancing and the acquisition of a number of the<br />
minority interests, <strong>BBI</strong> has no plans to sell down any further stake in <strong>Euroports</strong>."<br />
<strong>Antin</strong> <strong>Infrastructure</strong> Partners Managing Partner, Mark Crosbie said "We are pleased to have reached a<br />
revised agreement with <strong>BBI</strong> that has considerably simplified the group structure, recapitalised the<br />
business and created a share equalisation adjustment to reflect the future performance of the business<br />
thereby enabling each of us to now focus on future delivery from this unique Continental European port<br />
business."<br />
Managing Partner, Arcus <strong>Infrastructure</strong> Partners, Mr Toto Lo Bianco, said "We welcome the revised<br />
transaction which ensures financial robustness of <strong>Euroports</strong> while providing potential upside for all<br />
investors from further growth and synergies across the portfolio."<br />
<strong>Euroports</strong><br />
<strong>Euroports</strong> is one of the largest port operators in Europe and owns a portfolio of port concession<br />
businesses in over twenty strategic locations throughout Europe. The portfolio operates in an unregulated<br />
economic environment, with long term concession agreements and with a mixture of long-term and short<br />
term customer contracts, derives strong and stable cash flows which present good potential for ongoing<br />
growth. For the year ending 30th June 2009 <strong>Euroports</strong> is expected to report earnings down circa 8% on a<br />
recurring basis against the prior comparable period, thereby showing the benefits of the geographic and<br />
product diversification across the portfolio in one of the most difficult trading environments experienced<br />
in many years.